In September, Fed Chair Jerome Powell acknowledged that last year's mortgage rate shock would cause the U.S. housing market to pass through a "difficult [housing] correction." Homebuilders' earnings showed he was correct: In the fourth quarter of 2022, KB Home's buyer cancellation rate spiked to 68%. That figure dwarfed the publicly traded homebuilder’s 13% cancellation rate from the previous year's period. It also surpassed the industry's peak cancellation rate of 47% during the darkest days of the 2008-era crash.
But the worst of the storm might be behind us. At least for builders.
